A Focus on Bangladesh: Creating Sustainable Environment through IR Practices

By Pravat Ghose, Advocate, MA, LL.B., PGDHRM

Focusing on Positive:

Bangladesh became the 47^th Economy in the world. Organized industrialization along with unorganized sector was the main driving force of this achievement. Textile industry, which includes knitwear and ready-made garments, specialized textile products, is the nation's number one export earner, accounting for 80% of Bangladesh's exports of $15.56 billion in 2009.

Bangladesh is grouped in Next Eleven (N-11) of eleven countries by Goldman Sachs Investment Bank along with Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey and Vietnam. These counties will be the largest economies in the 21^st Century and very prospective for investment and growth. It is also in the list of 3G Countries (Global Growth Generator) countries of 2010 – 2050. All of these positive indicators are reflection and forecast of economy with great future. Bangladesh is continuing with GDP 6-6.5 for last 5 Years except in 2008.

Though there are lots of positive speculations, still we are not competitive enough to beat China and other growing economies. 60% of our people live with less than $1 a day. But our labour and production cost is not well ahead to compete with China. Let’s analyze the reason on IR context.

Learning from Past:

Bangladesh was basically an agricultural country. Industrialization is a new concept for Bangladesh and started rapidly in 80s. Industrial environment has not achieved its right shape. Most of the factories in Bangladesh do not have necessary compliance as per the Labour Code 2006. It is hard to admit but true that Bangladesh is facing similar humanitarian crisis that England and other European countries faced during the time of Industrial Revolution in 18 Century, such as, poor wages, unhealthy environment, depriving from the right to bargain.

Big Things Should Come First:

Thinking of Fair Wages:

In last few years in labour unrest in garments industry damaged the reputation and brought out exploitation that our workers face everyday. In 2008 labour unrest cost was minimum USD 88.4 million. In Ready Made Garments Sector labour unrest flares up 72 times in 6 months in 2008 resulted 988 injured. Present quietness of labour unrest does not mean that it is over. In Bangladesh, 50% of families of six live with less than $1 per day. Ignoring this issue or using political support to suppress this issue is not a solution.

As expenses are going up with inflation and rise of the price of commodity, wages issue will come up soon. It should be addressed immediately as it is related to stability and sustainability to the sector especially in Textile Industry. If we compare the labour unrest in Textile Industry with Pharmaceutical Industry, we found the there is no secondary data of labour unrest in Pharmaceuticals Industry. From primary source there are 3 reported incidents in last two years. As a result, this high-tech industry is steadily growing though we have severe shortage of skilled workers. In pharmaceutical industry, average service length of worker in the same factory is average 11.5 years (based primary data of 12 pharmaceuticals factories) which is really satisfactory.

We have to admit that even a day-long unrest and anarchy in a massive industry causes a loss that cannot be recovered throughout the year. 

Rights for Bargaining:

In Bangladesh, there is a fake fear existing within the employers that if workers get the lawful right to bargain, they cannot be controlled. This is not true. The private companies, which have long CBA (Collective Bargaining Agent), have low record of anarchy, strike. In public sector, record is different. And main cause for this is political influence from outside of the factory and government’s (ruling party’s) direct and indirect patronization in unfair labour practice. Private Companies, which have independent CBA, enjoyed uninterrupted operational advantage for last ten years.

In 2008, when protest of the workers flamed up, the employers were unable to find out the leaders to negotiate. As employer denied the right of structured legal leadership through CBA, they had to pay the prize.

Immediate Attention to the grievance:

From a Case study on two sweaters industry I found an interesting fact that absence of grievance policy caused fatal industrial dispute. These factories have wonderful environment and compliance history. Moreover, average earning of the workers in these factories is 4 times than minimum wages.

Right to have proper employment:

In Bangladesh, lots of workers work as casual daily workers in permanent positions year after year. In this way, employers deny the right of worker to have Provident Fund, Gratuity, Sick, Casual, Earn Leave and WPPF (Worker’s Profit Participation Fund). Nine out of ten factories have this mal-practice. It caused fatal clash in one industry in 2010.

Industrial Safety:

Ship breaking industry has the worst record in industrial safety. Worker’s death sparks riots in eight Factories in 2009. Average downtime was 2.6 days per year in the factories I considered in my case study. If we consider the industry as a whole, it is a massive loss.

 

Ignorance about industrial safety, not providing PPE (Personal Protective Equipments), inadequate ventilation, inadequate number of skilled operator, lack of training, casual types of employment, inadequate fire-prevention and fire-fighting equipments, absence of preventive maintenance are main causes of industrial accidents.

 

Limitation of the writing:

IR research in Bangladesh is not comprehensive. There is no industry-wise calculation related to financial loss caused by Industrial Accident. Analysis is based on small sample size. Unorganized small industries like in “Dholai Khal” became huge. It is difficult to find data due to non-cooperation from the employers.

 

 

 

Conclusion:

 

In spite of limitation of study behind this writing, it is clear that real attention of Industrial disputes and safety can add a fat margin to the bottom-line of industry and a portion of it can be utilized to ensure fair wages to the workers. Moreover, it will create a motivated workforce and sustainable work environment.

Reference:

• News Age, Dhaka, August 6, 2008
• Competitiveness of the Bangladesh Ready-made Garment Industry in Major International Markets by Mohammad Ziaul Haider
• http://en.wikipedia.org/wiki/Economy_of_Bangladesh
• Industrial Relation in Bangladesh by Md. Maidul Islam, Chairman, Department of Management, University of Chittagong, Bangladesh.
• Current Status and Evolution of Industrial Relations System in Bangladesh by Dr  Abdullah Al Faruque
• "Doing Business in Bangladesh 2010". World Bank. Retrieved 2010-08-20.
• "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
• Lawrence B. Lesser. "Economic Reconstruction after Independence". A Country Study: Bangladesh (James Heitzman and Robert Worden, editors). Library of CongressFederal Research Division (September 1988). This article incorporates text from this source, which is in the public domain.About the Country Studies / Area Handbooks Program: Country Studies - Federal Research Division, Library of Congress
•  "Full blown RMG violence at Ashulia" The Financial Express VOL 18 NO 168 REGD NO DA 1589 Dhaka, Tuesday June 22, 2010. Retrieved July 17, 2010.
• "'China textile cos may go bankrupt'" The Financial Express Tuesday, Jul 13, 2010 at 1210 hrs IST. Retrieved July 17, 2010.
• "Bangladesh, With Low Pay, Moves In on China" article by Vikas Bajaj in The New York Times July 16, 2010. Retrieved July 17, 2010.
• "One dead after Bangladesh protest" BBC May 23, 2006
• "Apparel Workers Resume Production In Bangladesh" All Headline News June 23, 2010. Retrieved July 17, 2010.
• "Bangladesh garment industry edging closer to wage deal?" just-style.com 9 July 2010. Retrieved July 17, 2010.
• Bangladesh Export Promotion Bureau.
• Bangladesh Sangbad Sangstha (National News Agency of Bangladesh).